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The landmark Tax Reform Act of 1986 would never have happened without Jack Kemp. The voluble supply-sider, who died yesterday at 73, helped make tax reform, and not just tax cuts, acceptable to Republicans.
As early as 1977, then-congressman Kemp and Senator Bill Roth (R-DE) pushed a bill that would have reduced tax rates across-the-board. In 1983, Kemp bucked many in his party by making back-channel overtures to Democratic tax reformer Senator Bill Bradley (D-N.J.)—an effort recounted in Jeff Birnbaum’s and Alan Murray’s Showdown at Gucci Gulch. Bradley and Kemp shared a key political insight: If you can get rates low enough, you will ease the pressure to create, and protect, tax loopholes.
At a critical turn in the tense congressional debate over TRA 86, Kemp swallowed hard and accepted the version of reform that had been cobbled together by House Ways & Means Committee chairman Dan Rostenkowski (D-IL.). It is tough to imagine today, but before Kemp’s endorsement, House Republicans were in full revolt against the Ronald Reagan’s signature second-term domestic issue. By backing the plan, Kemp helped turn enough of his reluctant colleagues to get Rosty’s bill through the House.
Kemp and Rostenkowski were hardly pals (to borrow a favorite word from the Chicago pol’s lexicon), and Kemp’s agenda in ’86 was pretty clear—he wanted to use tax reform as springboard to the GOP nomination for president in 1988. The top rate of 38 percent in Rostenkowski's bill was much higher than the 30 percent Kemp preferred, but the former pro quarterback truly believed in the benefits of low individual rates. In the end, he was willing to accept a deal that eliminated targeted tax subsidies and significantly raised taxes on business to get them.
In retrospect, tax reform was the high water mark of Kemp’s political career. He quit his upstate New York House seat to run for president in 1988, but lost the nomination to George H.W. Bush and eventually served a frustrating term as Bush’s housing secretary. In 1996, he ran as Bob Dole’s running mate, a role that made him absolutely miserable. Finally, Kemp, who deeply believed in a big-tent GOP, watched his party shrink to a core of ideologues under George W. Bush.
Kemp was a key member of the most improbable band of reformers: Bradley; Rostenkowski; Senate Finance Committee Chair Bob Packwood (R-Ore), who had built his career larding the revenue code with the sorts of tax subsidies that reform was intended to eliminate; and Reagan, who never could muster quite the same enthusiasm for the ‘86 reform as he could for his ’81 tax cuts. But like the others, Kemp was willing to work across the aisle to make reform happen. It is, sadly, hard to imagine a politician today doing what Kemp did back in 1983-86.
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